William Dickens wrote:
>
> Since deregulation, start-ups come and go. Big airlines seem to survive on the basis
>of the monopoly power they derive from their terminal slots at major airports.
>Otherwise airlines might be the classic case of a declining cost industry with few
>barriers to entry making it impossible for anyone to stay in business for long since
>competition will tend to drive prices down to marginal cost < total cost ...
This doesn't seem consistent with the usual story that big airlines want
slots allocated by competitive bidding, while small airlines don't. If
the slots are the source of the monopoly power, competitive bidding
would lead to full dissipation of the rents, no?
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]
"[T]he power of instruction is seldom of much efficacy, except in
those happy dispositions where it is almost superfluous."
-- Edward Gibbon, *The Decline and Fall of the Roman Empire*
